Chancellor George Osborne has announced in his Autumn Statement a limit on the rise in business rates.

George Osborne

Business rates in England and Wales are to be capped at two per cent rather than linked to Retail Prices Index inflation, with some retail premises in England to get a discount on their business rates.

Businesses will also be allowed to pay their rates in 12 monthly instalments. The discount on business rates will be worth £1,000 to every retail premise in England, with a rateable value up to £50,000.

He also announced that employers won’t have to pay national insurance for workers under 21. The move will affect 1.5m jobs for young people.

Osborne said he will scrap a planned increase in fuel duty due to come in during September 2014. He claimed petrol will be 20p per litre less than it would have been.

Some £1bn in loans was announced to boost housing developments in Manchester, Leeds and elsewhere. There will be improvements to the A50 around Uttoxeter, in Staffordshire, and improvements to the A14 around the port of Felixstowe in Suffolk

Osborne said rundown urban housing estates will be regenerated.

Other announcements include a cut to Defra's budget as part of another £1bn of Whitehall cuts for each of the next three years.

Growth forecasts for this year more than doubled from 0.6 per cent to 1.4 per cent, for next year revised up from 1.8 per cent to 2.4 per cent, and for the following four years to 2.2 per cent, 2.6 per cent, 2.7 per cent and 2.7 per cent.

The state pension age will increase to 68 in the mid-2030s and to 69 in the late 2040s.

REACTION:

Coblands sales manager Lewis Normand said: "The reduction in National Insurance so there is none payable for under 21s will benefit employers and the industry as a whole by bringing people in who maybe we wouldn’t encounter otherwise."

Unite said: "The 1.1 per cent reduction in Whitehall departmental budgets for 2014-15 and 2015-16 is bad news for public science, with the Departments for Business and Environment, Food and Rural Affairs among those that will be affected by these cuts."

Phil Orford, chief executive of The Forum of Private Business said: "There are some positive measures in today’s speech to help reduce the cost of doing business. With fuel duty frozen, £1,000 rebate on business rates and a subsidy on employing young people, there are measures worth thousands to small businesses. Within a time of constrained budgets, it‘s good to see the Chancellor has listened to the concerns of small firms around rising costs."

John Longworth, director general of the British Chambers of Commerce said: "The Chancellor has in large part heeded business’s call for a steady Autumn Statement, rather than a grab bag of electoral giveaways. While Britain’s economy is improving, and our businesses report strong confidence, the UK is still some way from achieving the truly great economy we need."

"Business will be pleased that the Chancellor has finally acted on business rates bills after years of relentless increases that sucked the life out of businesses in all parts of the UK. The measures announced to curb business rate increases are positive, but not strong enough to boost companies’ cash flow and investment. The Chancellor should have been bolder, freezing business rates entirely until this pernicious tax can be properly reformed.

Helen Dickinson, British Retail Consortium director general, said: "The Chancellor has recognised that businesses are suffering and is right to listen to retailers’ concerns on business rates. The BRC has campaigned for a two per cent cap, and reform of the business rates system, and it is extremely welcome to hear it announced.

"The Chancellor has recognised the consensus that exists that the business rates system should be reviewed. The BRC is already conducting a detailed study into options to improve the business rates system with tax experts EY and look forward to playing a full part in the discussions that will take place with Government on the reform of the system.

"With the additional measures also announced today on National Insurance, retailers will be encouraged to do even more to support the aspirations of young people across the country. 40% of all jobs for those under 20 are in retail, and this will help retailers provide secure career opportunities for young people."